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10472248Intermediate Econ practice problems need help solving!


3. (10 total points) Suppose that Lynn enjoys sugar in her coffee. She has very particular preferences, and
she must have exactly three spoonfuls of sugar for each cup of coffee. Let C be the number of cups of
coffee, and S be the number of spoonfuls of sugar. Also. let Pu be the price ofa cup of coffee. Suppose
Lynn has $l2 to spend on Coffee and Sugar. Also. the price of Sugar is $.20 per 'spoonful. Graph Lynn's Price consumption curve for prices. Pr“ = $.60. Pc : $.90. and Pr- = $1.80. Please put the
number of cups of coffee (C) on the horizontal axis. and the number ofspoonfuls of Sugar (5) on the
vertical axis. Be sure to graph each budget constraint associated with each price of Coffe, identify Lynn’s
optimal bundle on each budget constraint. and make sure your graph is labeled carefully and accurately.

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C - no. of cups of Coffee.
8 - Sugar
UCC,s) = minEc, 5133
Income = $12
PS = $ 0.20
PC = $0.60 ,$0.90, $1.80
optimal bundle
C = S/3
for Pc = $0-60
i.e (3 c = S
0.60 C + 0. 205 = 12
6C + 6C = 120

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